India will raise the import duty on sugar to 40 per cent from 15 percent and will consider other incentives for mill owners if they clear dues owed to farmers, the food minister said on Monday.

The government will to provide additional interest-free loan of Rs 4,400 crore to cash-starved sugar mills to make payments to cane farmers.

“We have reached a consensus to raise the import duty to 40 per cent and to consider other incentives provided mills clear Rs 110 billion ($1.84 billion) in dues to farmers,” Ram Vilas Paswan said after meeting the sugar industry officials.

Paswan also told reporters the subsidy of Rs 3,300 per tonne on raw sugar exports would be extended until September. India increased the subsidy for raw sugar earlier this month to boost output and exports.

The government has also decided to raise the mandatory blending of ethanol in gasoline to 10 per cent from 5 per cent.